MDR debate returns as UPI turns 10; govt subsidies cover just 11% of industry costs
Ten years in, UPI's zero-MDR model faces fresh scrutiny. Government incentives offset only 11% of digital payment industry costs and 14% of potential revenue across FY22-FY25. Policymakers weigh a calibrated MDR on larger merchants above ₹2,000 to fund infrastructure while shielding small merchants.
What happened
MDR debate resurfaces as UPI marks 10 years. Government incentives covered only 11% of digital payment industry costs FY22-FY25. Policymakers weigh calibrated
Key facts
- 11% of costs
- 14% of potential revenue
- ₹2,000 transaction threshold
- FY22-FY25
Why this matters
A return of MDR economics reopens M&A and partnership windows in payments infrastructure, loyalty, and merchant services where revenue pools have been suppressed for a decade.